Brexit Most Likely Triggered by April 2017 by the U.K.: Reports

08/20/2016

The best moment to trigger the start of formal talks over the U.K.’s withdrawal from the European Union, according to Prime Minister Theresa May’s team is the first part of 2017, reports Bloomberg quoting two British officials.

May is sympathetic to the case for acting by April at the latest as Germany and France prepare for elections and pro-Brexit campaigners at home warn against delay even as reports emerged in the U.K. media recently which suggested May could wait until the end of 2017 before opening two years of negotiations.

Following the news, there was a drop in the pound the most in two weeks. Paring a weekly advance against the dollar, Sterling fell against all of its 16 major peers. As of Friday, it declined 1 percent to $1.3042, the steepest since Aug. 4.

Invoking Article 50 of the Lisbon Treaty, which lays out how a country quits the EU, could be best suited during a March summit of European leader, one of the officials said.

To allow her government time to form a team and to prepare positions for what are likely to be marathon negotiations, May has held off starting the clock on Britain’s exit from the EU. And hence any move before the end of this year has been ruled out.

Since the new departments May has set up to handle the transition won’t be up and running as soon as once hoped, May might not even invoke Article 50 until the end of next year, The Sunday Times reported on Aug. 14. While Fox and Foreign Secretary Boris Johnson have already squabbled over the roles their departments will play, the chief Brexit negotiator, David Davis, and Trade Secretary Liam Fox are still in the process of hiring staff.

European leaders including Germany’s Angela Merkel have since accepted that Britain will need time to decide how it wants to work with the EU in future after some initially urged the U.K. to leave as quickly as possible following the June referendum.

However there are likely to be limits for their patience. Merkel and French President Francois Hollande are unlikely to want an extended period of uncertainty threatening their economies as they campaign for votes as they both face elections next year.

Germany will probably hold a parliamentary election in September and the first round of France’s presidential ballot is in April. The officials said that before those votes add further uncertainty to the political outlook, May would prefer to start formal exit talks.

Talks on Europe’s future in Italy on Monday are scheduled to be held by Merkel, Hollande and Italian Prime Minister Matteo Renzi.

“We’re seeing a great deal of uncertainty right now. There’s a fundamental understanding in the EU that the British government needs to reach clarity first. But things shouldn’t be put on the back burner, either,” German Deputy Foreign Minister Michael Roth said in a separate interview this week

Suspicions that May won’t deliver on her pledge to carry through the referendum result could also crop up among the U.K.’s pro-Brexit camp if May waits too long to begin talks. Already warnings against procrastination have been delivered by Conservative lawmaker John Redwood and Nigel Farage, the former leader of the U.K. Independence Party.